Abstract

Before entering into a commercial relation, labeling of charges over book debts is very essential for both of lenders and borrowers. Generally, labeling is made according to the intention of the parties but sometimes consequences seem to be different. So, controversy remains there. It was first declared in the case of Siebe Gorman & Co ltd v Barclays Bank Ltd (1979) that fixed charge can be created over book debts. But 25 years later the decision was overruled by the House of Lords in the case of Re Spectrum Plus (2005). The main purpose of this paper is to analyse how fixed and floating charges are categorised by different case laws and also the implications of the charges in common law jurisdiction. This paper also suggests that the controversy regarding the categorisation of charges can be solved by the rights and obligations of the parties confined to each other.